E-COMMERCE CONTINUES TO EXPAND
The revolution in electronic commerce is racing across our country, if not the world, like a wild fire. Internet traffic is doubling nearly every quarter and is expected to surpass 600 billion dollars in the next couple of years. Just five years ago, only 3 million people were connected to the Net; at the end of 1997, that number had grown to 100 million.
Small business, defined as those companies with less than 100 employees, has turned on to the Internet as well. A new study shows 1.2 million small businesses had Web pages at the end of last year; that's more than double the figure of the year before, and that number is expected to double again this year. A report from Bank One reveals that about 20% of small businesses with 10 or fewer employees now have Web sites.
Companies have turned on to e-commerce because setting up a Web site is now easy and inexpensive. According to USA Today, imagecafe.com, a cyberstore stocked with hundreds of elegant Web site designs, lets small firms customize, register and launch home pages for $300-$500. Additionally, IBM's home page creator helps businesses catalogue items for sale, and conducts secure credit card transactions for as little as $29.95 a month.
Of course, every time you get big-time expansion in a field, there is bound to be trouble afoot. Cyberspace, as it is known, is no exception. The trouble, among other things, is the so-called cybersquatters; these are people who register trademarks and other distinctive names on the Web, in the hopes of selling them to somebody else (i.e., the original owners who've not yet gone online) for big profits.
The Senate Judiciary Committee has approved legislation to try to combat cybersquatting. Among other things, it would prohibit a "bad faith" registration, or use of Internet addresses that are identical to or confusingly similar to, distinctive trademarks or surnames. The bill would also allow trademark owners to sue those who register brand names intending to divert consumers, create confusion, or mislead the public.
On the other side of the aisle, the House of Representatives has begun investigating a broad range of alleged trademark and copyright violations that are cropping up as the Internet grows.
There are all sorts of examples of "bad faith" cybersquatting. The Gateway Computer Company recently paid $100,000 to a person who bought the rights to an Internet domain with an address listed as "www.gateway2000.com." GOP presidential candidate Steve Forbes reportedly paid $6,500 to a couple of Arizona grad students who registered three Web sites, one of them being "www.forbes2000.com."
All this comes about because it is very easy to claim an Internet address. All that's required is that you're the first person to stake out a name that has not already been registered, then pay the two-year registration fee of $70. The number of registered Internet addresses has skyrocketed from 100,000 in 1995 to more than 7.2 million today.
Just a warning to employers and employees as they contemplate banking on the Internet. According to recent testimony before the House Banking Committee, while Federal bank examiners probe institutions on every loan and account, little oversight is given to Internet banking operations.
Richard Hillman, Associate Director of Financial Institutions for the General Accounting Office, says that in addition to the banks, the National Credit Union Administration performs absolutely no check on the Internet operations of the nearly 7,000 federal credit unions it regulates. Hillman told Congress that traditional banking risks are heightened by the access the Internet provides to anyone with a compatible computer, resulting in potential vulnerability to security breaches.
Lawmakers say the issue of Internet banking increases in importance as more and more consumers begin to bank online. According to the General Accounting Office, the number of households that bank through the Internet will increase five-fold from less than 7 million at the end of last year to more than 32 million in the next couple of years.
A government study says that already some 2,500 banks and thrifts and another 1,100 credit unions have Internet web sites. Many are able to perform a full range of transactions, from giving out balance information to loan applications over the Internet. Yet it is only recently that the nation's federal banking regulations have started paying attention to online operations.
(Tom Butenhoff is a First Vice President with J. E. Liss & Company in Milwaukee. The views are his and not necessarily those of Liss Financial Services or the Job Connection/Hiring Network.)